By Dr. Oliver Moore Communications Manager Arc20020 (major update June 2015; periodical updates since)
In July 2013, the EU and U.S. started negotiations on a bilateral free trade and investment agreement, the Transatlantic Trade and Investment Partnership (TTIP).
This potential deal is supposedly about simplifying the trade arrangements between the US and EU: it’s mooted to be about rooting out inefficiencies such as unnecessary double inspections and acknowledging similar standards where they exist. The idea is that it will increase trade between the two regions, improving the economy and generating employment along the way. Mainstream voices of politics and business support TTIP as a likely source of jobs and growth, without, they claim, impacting negatively on the EU’s higher health, environment, labour and other standards.
Critics however, claim that this agreement could have a major negative impact on food, agriculture, environment and labour standards on both sides of the Atlantic.
Video: What is the Transatlantic Trade Investment Partnership?
As tariffs between the EU and U.S. are already low (on average only 4%), much of the focus of this agreement will be on regulations, non-tariff barriers and red tape. Some of the ambitions of those driving TTIP include streamlining food and safety regulations (such as those on hormones, GMOs, nanomaterials etc.); to further reduce agricultural trade tariffs; to liberalize public procurement; and to protect investments. This latter aim is one of the most controversial aspects to TTIP, as it means that it will be far easier for Corporations to sue countries for lost potential profits, thereby disabling present democratic decision-making on many issues at local and national levels.
Threat of lowered standards and regulations
TTIP threatens and may already be encouraging the lowering standards to the lowest common denominators on both sides of the Atlantic, weakening standards designed to protect health and environment through regulations and safeguards in areas including chemical safety, energy and agriculture. The priority given to maximizing trade, the shift of power from national governments to a new trade committee, the threat to the ability of local authorities to set higher standards, the risk of minimal health and safety checks for novel foods (including GMOs, cloned animals, and nano materials), non-binding provisions for animal welfare, and the required adoption of international food standards established through the World Trade Organisation (WTO) all exemplify this worry, as Friends of the Earth Europe, Institute for Agriculture and Trade Policy, Compassion in World Farming, Center for Food Safety and GRAIN noted in February.
Corporate influence on negotiations
The deal threatens to give more rights to companies through the inclusion of a an ‘investor-state dispute settlement’ (ISDS) clause (also known as ISDR, for ‘Resolution’). If included in the deal, this would enable corporations to sue governments for loss of revenue when changes in policy or regulation are seen to infringe on their right to do business or are seen to affect expected profits.
Even in the negotiating phase, powerful business lobby groups are already heavily pushing for the decrease environmental, consumer and social protections. Many of these corporations are lobbying decision makers for weakening standards to be the essential aim of the negotiations. The vast majority of lobby organisations are corporate (see image) and the majority within that is the agri-food sector, as Corporate Europe Observatory show.
With ISDS companies can by-pass national/European court systems and go directly to international, investor-biased tribunals of just three arbitrators. These private tribunals “are comprised of three for-profit arbitrators who issue their decisions behind closed doors and often have a conflict of interest as they have a commercial interest in keeping the system alive and they often work for the same companies that file cases”
“When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all […] Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.” Juan Fernández-Armesto, arbitrator from Spain (via Friends of the Earth 2013)
For example, if a government bans genetically modified foods, a seed or pesticide company could sue for loss of profits. Under other existing investor-state agreements challenges are already being brought by oil, gas and mining companies, the nuclear industry, and pharmaceutical giants which deem that their profits are being damaged by changes to health and environment regulations.
ISDS would allow companies far more freedom to challenge democratically agreed decisions and the jurisdiction of Member State and EU Courts. As such ISDS are not in the public interest and should be excluded from the mandate.
While ISDS do already exist, they would inevitably be radically ramped up post TTIP, unless expressly excluded. (Some amendments in the recent EU Parliament Plenary abandoned vote attempted to do this). As a recent Friends of the Earth Europe Publication warns, already 127 known ISDS cases have been taken in the EU since 1994, mostly in the more economically marginalised east, which can little afford to carry the cost. Of the 62 in the public domain, these have cost member states E30 billion: in the case of the Czech Republic, the equivalent of their entire health budget was taken up for one year – E354 million – paying off an ISDS settlement. Poland paid E2 Billion in trying to retain public ownership of its health services.
And as David Cronin pointed out, TTIP is about making alternatives to rampant capitalism – such as some public ownership of vital assets – less and less possible. The crucial point is this: post TTIP, ISDS would be amplified, unless expressly excluded in the final deal. Incredibly, up to 75000 cross-registered firms could gain access to ISDS.
What is ISDS?
Under severe pressure from citizens, supposed compromise versions of ISDS have been suggested, such as an international investment court. Even this compromise has been described as only a medium term objective in light of something much more like ISDS by EU Trade Commissioner Cecilia Malmstrom, who has also developed a concept paper on an the idea of an Investment Court.
This is in essence the same thing as ISDS, merely replacing one type of unaccountable court with another.
There are troubling developments which are very like ISDS, such as regulatory harmonisation/coherence/chill
According to UK Trade Union the TUC: “When ISDS is present in trade deals, governments have scrapped potential policies that they fear will trigger an ISDS claim – described as the ‘chilling effect’ on policy making. For example, the government of New Zealand withdrew laws on plain cigarette packaging after Phillip Morris sued Australia through ISDS for introducing similar laws. The government of Canada, meanwhile, revoked a ban on hazardous waste exports to the USA as it feared this would be subject to an ISDS claim.”
Whether or not ISDS is part of a TTIP deal, there are worrying signs that it is both having a chilling effect on EU legislation and that attempts to harmonise regulations between the EU and US are in motion anyway.
Arc2020’s Robert Pederson has noted the relegation of Endocrine Disruptors as an issue in the workplan of the EU Commission. The Guardian add to this, suggesting that documents obtained by Pesticide Action Network Europe reveal the EU dropped pesticides laws due to US pressure over TTIP: “Draft EU criteria could have banned 31 pesticides containing endocrine disrupting chemicals (EDCs). But these were dumped amid fears of a trade backlash stoked by an aggressive US lobby push”.
It is also the case that WTO rulings, such as the recent COOL – Country of Origin Labelling – are showing just what can happen with ISDS or ISDS-type set ups become established. As Shefali Sharma of IATP pointed out:
“On May 8th, President Obama told a crowd in Oregon: No trade agreement is going to force us to change our laws. Twelve days later, the House Agriculture Committee voted 38-6 to repeal in its entirety country-of-origin-labeling (COOL) for beef, pork and poultry. The House vote came in response to a May 18 ruling by the World Trade Organization (WTO) that the U.S. had violated global trade rules by requiring supermarket labels on beef and pork to indicate where livestock was born, raised and slaughtered. The meat industry is elated.”
Meanwhile, the EU, according to leaked documents, have decided to reject mandatory labelling too.
Bad diets increase with (bad/all) trade deals.
In a number of direct ways, TTIP could radically alter the available foods, away from quality and towards ever more industrialised, lower quality food. Not only are feedlots standard in the US, the average farm size there is 13 times larger than in the EU. There are 13 million people employed in farming here, compared to just 2 million over there (Bizzarri 2013). This would make grass fed extensively raised beef from mixed farms very uncompetitive.
The hundreds of PDO and PGI designations in the EU for quality regional foods have also been targeted as trade barriers.
When other similar trade agreements came in in different parts of the world, the verifiable affect on the food available, and the people eating it, was shocking. There was an influx of highly processed, nutritionally poor food, full of sugar and salt: the more durable and profitable parts of the food chain.
The diseases of western civilization – type two diabetes, heart disease, certain cancers and obesity – became more common. And those jobs? Extremely flexible, with many poorly paid, part time jobs in processing units or as labourers on mega units.
Anand Grover, UN Right to Health Rapporteur’s report from April 2014, (note: link initiates .doc download) underscores this issue: “Studies show that countries adopting market deregulation policies experience a faster increase in unhealthy food consumption and mean body mass index, an indicator of obesity.”
“Self-regulation by companies has not had any significant effect on altering food marketing strategies.”
“Bilateral investment treaties may subvert existing internationally agreed upon guidelines and lower tariff and non-tariff barriers to trade, allowing freer import and export of unhealthy food products. For instance, free trade agreements have been directly linked to an increased consumption of soft drinks.”
As well as the pesticide concerns outlined earlier, there are TTIP implications for bees via pesticides and for antibiotics and antimicrobial resistance (AMR), as our webinar with the Institute for Agriculture and Trade Policy outlined.
Lack of transparency
The negotiations are shrouded in secrecy and it is difficult for the public to know exactly what is being discussed and agreed. The European Commission has the mandate to negotiate on behalf of its member states, without true involvement of the European Parliament or civil society. Key documents such as the negotiating mandate are not available for public scrutiny. On the other hand, only a limited number of trade advisors in the US, most of whom come from business background, have access to the negotiating documents.
Some small progress has been made on the transparency issue, thanks again to the pressure from citizens. Reacting to this momentum, a European Commission Transparency Initiative was launched last November. it was also reported earlier this year that the US was to open reading rooms accross EU (29.04.2015)
Nevertheless the Ombudsman remains unconvinced, stating that the EU must interrogate US over TTIP transparency (21.04.2015). Corporate Europe Observatory point out that the TTIP talks are, despite the PR still under a cloak of (secrecy 05.05.2015).
Secrecy indicator #1: The really crucial TTIP texts will remain hidden from the public
Secrecy indicator #2: The EU position on some sensitive TTIP issues will remain secret
Secrecy indicator #3: Member states’ access to the most important TTIP texts is limited
Secrecy indicator #4: MEPs’ access to the most important TTIP texts is limited
Secrecy indicator #5: The EU continues to hide its contacts with business lobbyists on trade policy
Any good news?
Yes! We have having an influence! Thousands have mobilised, from informing themselves to taking to the streets in their tens of thousands.
Thousands march against TTIP, GM and factory farming We Are Fed Up January 2015
Two years ago, when we first started drawing people’s attention to TTIP, there was little knowledge of or concern about TTIP. Now, numbers who have signed the self-organised European citizen’s initiative against TTIP and CETA keep rising – over 2.2 million. A broad alliance – including chefs and mainstream farming organisations – has emerged to oppose TTIP. Farmers from Germany and Belgium , citizens from Romania and many parts of eastern Europe have emerged opposing TTIP. It is also the case that spectacular victories have been achieved. These include in the refusal of the European Parliament to vote on TTIP in June in the European Parliament, due to divisions in the S&D group over ISDS, the admittedly farcical compromise of Amendment 117 and the (supposedly public but still for corporations only) ISDS part 2 it supports, and the fast track debacles in US, which have seen both House and Senate reject Obama’s Fast Track plan, before its eventual acceptance. More recently, TPP – the Pacific rim variant of TTIP, is faltering due to a combination of public pressure and sectorial power blocs. The interrelated nature of these trade deals makes this especially significant.
Munich 40,000 March against TTIP 04.06.2015
Timeline of negotiations to date
- 17 June 2013 – announcement of official launch of negotiations by US President Barack Obama, President of the European Commission José Manuel Barroso, President of the European Council Herman Van Rompuy and UK Prime Minister David Cameron
- 18-12 July 2013 – first round of negotiations in Washington
- 11-15 November 2013 – second round of negotiations in Brussels
- 16-20 December 2013 -third round of negotiations in Washington
- 10-14 March 2014 – fourth round of negotiations in Brussels
- 27 March, 2014– European Commission launches public online consultation on investor protection
- 19 – 23 May 2014 – fifth round of negotiations in Washington
- 14-18 July 2014 sixth round of negotiations in Brussels
- 29 September – 3 October 2014 seventh round of negotiations in Washington
- 2 – 6 February 2015 8th round of TTIP negotiations in Brussels
- 5 February 2015 2nd annual EU-US conference on the Transatlantic Trade and Investment Partnership, Where now for the EU-US trade deal?
Links and further reading
- All ARC2020 news features on TTIP
- Promises and Perils of the TTIP: Negotiating a transatlantic agricultural market, Institute for Agriculture and Trade Policy
- Transatlantic Trade and Investment Partnership (TTIP), European Commission, DG Trade
- Transatlantic Trade and Investment Partnership, US Trade Representative
- TTIP: a loose-loose deal for farming Corporate Europe Observatory
From 2013 and 2014
European Ombudsman launches public consultation in relation to the transparency of the Transatlantic Trade and Investment Partnership (TTIP) negotiations, European Ombudsman, 22.09.2014
Commission opposes European Citizens’ Initiative against TTIP, Euractiv, 12.09.2014
European Citizens Initiative Stop TTIP refused, European Commission, 10.09.2014
Transparency and public participation in relation to the Transatlantic Trade and Investment Partnership (‘TTIP’) negotiations, European Ombudsman, 29.07.2014
Who lobbies most on TTIP? (with infographics) Corporate Europe Observatory, 08.07.2014
‘EU–US trade talks: what chance for transparency?’ Friends of the Earth Europe: 14.01.2014
The struggle for transparency in the U.S.-EU trade deal Institute for Agriculture and Trade Policy, 05.11.2013
EU-Canada trade deal leak ‘ridicules’ TTIP consultation, campaigners say, Euractiv, 15.08.2014 (CETA leaked text)
Report for European Parliament warns of trade deal risks (ISDSs used already to challenge environmental regulations) ARC2020, 31.10.2013
This transatlantic trade deal is a full-frontal assault on democracy The Guardian, 04.11.2013
TTIP will sacrifice food safety for faster trade, warn NGOs, Euractiv, 28.08.2014
10 reasons why TTIP is bad for farming and food IATP/ARC2020 10.07.2014
Trade deal to undermine health, environmental standards IATP, 26.06.2013